Omnitrax threatens NAFTA challenge as Ottawa files lawsuit

[tay]

The federal government on Tuesday filed a lawsuit against Omnitrax — the owner of the washed-out rail line leading to the isolated community of Churchill, Man. — while the company said it would challenge Ottawa under the North American Free Trade Agreement (NAFTA).

The government filed its statement of claim against the U.S. company for breach of contract, Transport Canada said in a news release. Ottawa is demanding $18 million, plus interest.

The lawsuit followed Omnitrax's declaration earlier in the day that it intends to ask for independent arbitration under NAFTA — alleging the federal government has "sabotaged" efforts to repair and transfer ownership of the line.

Omnitrax, which also owns the Hudson Bay Railway Company and the Port of Churchill, has been under pressure to repair the now-inoperable line after flooding washed portions of it away in May. Northern communities that can't be reached by road and have relied on the railway to supply basic necessities face skyrocketing prices for staples such as groceries and fuel.

The Denver-based company has refused to make the repairs, claiming they were "not economically feasible" and insisting Ottawa should foot the bill.

Omnitrax filed a notice of intent to submit a claim under Chapter 11 of NAFTA, which allows businesses to sue a government without first going through the country's court systems. It is intended to protect foreign investors from discrimination.

Omnitrax bought the railway from CN Rail and the now-closed Port of Churchill from the federal government in 1997.
In 2008, the federal and Manitoba provincial governments pledged $20 million to help upgrade the railway.

The contract that came with the money, obtained through Freedom of Information requests, said Omnitrax had to complete the upgrades by October 2018. That was extended to 2019.

Transport Canada said in an email to CBC News that under the agreement, Omnitrax also had to maintain and operate the rail line for 10 years after repairs were completed — until 2029.

If the company discontinues or abandons the rail line or port, Ottawa is entitled to have the funding returned, the contract says.

But Omnitrax argues recent events amount to a force majeure — a legal term referring to unforeseeable circumstances that excuse a party from fulfilling a contract — and it is unable to fulfill its contract with the federal government.

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Omnitrax threatens NAFTA challenge as Ottawa files lawsuit - Manitoba - CBC News

 

[taxslave]

You would think what with the ice free Arctic ocean for the last 4 years both the rail line and port would be beehives of activity.

 

[bill barilko]

You would think what with the ice free Arctic ocean for the last 4 years both the rail line and port would be beehives of activity.

Transporting what to sell to whom?

It takes decades to get that kind of thing going-a friend of mine writes for a shipping industry magazine it's a monster business and like any business has it's own ways.

 

[petros]

Grain.

 

[taxslave]

Transporting what to sell to whom?

It takes decades to get that kind of thing going-a friend of mine writes for a shipping industry magazine it's a monster business and like any business has it's own ways.

You own a port and the only access to it you generally look for commodities to ship. As I recall there are grain elevators already in place. SO grain, coal metals from the Canadian shield. How about imports from Europe? RORO freight oof ships and right onto railcars. BYpass the whole St. Lawrence.

 

[bill barilko]

You own a port and the only access to it you generally look for commodities to ship.

Bully for you-can you do it for less than the competition-long established operations?

As I recall there are grain elevators already in place.

That have sat empty for how long?

Are they even capable of handling grain safely?

Remember with food perception is everything.

SO grain, coal metals from the Canadian shield.

Again what Magic Genie is going to give you those contacts that lead to contracts?

How about imports from Europe? RORO freight oof ships and right onto railcars. BYpass the whole St. Lawrence.

Those imports now arrive right in the middle of the greatest population density in the country you want to ship them from the edge of nowhere-are you aware that it's almost 2,000 km from Churchill to Toronto just by air?

And you want to ship what where how?

It ain't gonna happen-fire up another pipe.